Medical Marijuana Stocks
Momentum is growing across America to make medical marijuana a legal, regulated product—like alcohol and tobacco. As marijuana-related companies develop innovative new products to serve this rapidly growing market, investors are taking a closer look at medical marijuana stocks.
Where Is Medical Marijuana Legal?
Marijuana remains a Schedule I controlled substance under federal law. However, individual states have passed ballot measures or legislative action to make marijuana legal for recreational and/or medical purposes.
Currently, legal medical cannabis is a reality in 21 states and the District of Columbia; an additional 14 states, including Florida, have legislation or ballot measures pending to legalize medical marijuana.
Washington and Colorado are the only states where recreational marijuana is legal; however, Alaska, Oregon and others are considered likely to follow suit.
Are Medical Marijuana Stocks Legal?
Some investment experts advise against purchasing medical marijuana stocks until the drug is legal throughout the U.S. They fear that buying stock in a company involved in medical marijuana could subject the investor to arrest for “aiding and abetting” in the cultivation and sale of marijuana, since it is still illegal under federal law.
While there are many regulatory questions surrounding medical marijuana, medical marijuana stocks are legal, and people are becoming less resistant to investing in legitimate marijuana businesses.
In fact, High Times magazine recently launched a private-equity fund that is reportedly seeking to raise $100 million and build a portfolio of medical marijuana-related businesses over the next two years.
As with any investment, the old saying, “Let the buyer beware” certainly applies to medical marijuana stocks.
How Medical Marijuana Stocks Are Sold
A few medical marijuana stocks are listed with the major exchanges, but most are “penny stocks.” Penny stocks are defined by the Securities and Exchange Commission (SEC) as those trading at below $5.00 per share and not listed on a national exchange; they are available on over-the counter exchanges. Such stocks present a high risk for investors because of their volatility. In addition, these exchanges are not as tightly regulated and lack basic investor safeguards.
For example, over-the-counter exchanges have no listing standards, such as a minimum market value or independent boards of directors. According to experts, the stocks are small and easily manipulated. Many fluctuate in value by more than 10% in a day.
Publicly Traded Marijuana Stocks
Here is a partial list of publicly traded marijuana stocks:
- GW Pharma: Trading on the NASDAQ, and based in the UK, it develops cannabinoid medications for MS and cancer.
- Advanced Cannabis Solutions: Buys growing facilities and leases them to growers.
- CannaVest: Produces Cannabidiol, a cannabis oil that has been shown to reduce seizures without the high that is produced from THC in cannabis.
- Cannabis Sciences: A leader in product research, with two pre-clinical drugs focusing on HIV and cancer.
- Fusion Pharm: Produces the PharmPod, a scalable solution for commercial growers and small operations.
- Medbox: Maker of products that dispense medications. A cannabis vending machine is in the works. Recently acquired Vaporfection International, Inc., a manufacturer of vaporizers.
- AVT Inc.: Producer of vending machines.
- Hemp Inc. Maker of cannabis-based supplements.
- mCig: Makes a portable mini-vaporizer, with three different heat settings.
- Medical Marijuana:Produces cannabinoid oil products.
- Nuvilex: A biotech company that conducts research to fight cancer and diabetes.
- GrowLife: Producer of cannabis cultivation equipment.
Seek Advice Before Investing in Medical Marijuana Stocks
When it comes to investing, your first step should always be seeking the advice of a licensed professional. In the case of medical marijuana stocks, it is clear that the medical marijuana industry is not going away. There are opportunities for gains as well as losses.
Would you invest in medical marijuana stocks? Please share your thoughts below.